Ahead of mayor’s budget speech, aldermen question higher taxes, fines

October 22, 2013

Chicago Mayor Rahm Emanuel is hoping an economic upswing will help close a nearly $339 million dollar city budget shortfall next year, though some aldermen are already raising concerns about the host of higher taxes, fines and fees the mayor is expected to lay out in his annual budget speech to the City Council on Wednesday.

New budget details trickled out of City Hall on Tuesday, as Emanuel’s budget officials spent the day in closed-door briefings with small groups of aldermen, allowing them to circumvent Illinois’ open meeting laws.

The officials said the budget will rely upon about $100 million in better-than-expected revenues from hotel, sales and real estate transfer taxes, thanks to improvements in the housing market and the larger economy, according to aldermen in the briefings. Roughly $34 million more will come out of so-called “zombie funds” - that is, money that had been sitting untouched in various city accounts.

Emanuel also wants to declare a roughly $48 million surplus in the city’s tax increment financing districts, known as TIFs, according to aldermen and the mayor’s budget office. State law dictates how that money would be divvied up. That means about $8.7 million for city coffers, and about $24 million for the cash-strapped Chicago Public Schools system.

But some aldermen already had concerns about Emanuel’s spending priorities next year.

“We’re hearing some increases in tree trimmers, and graffiti [removal], which is good, ‘cause we definitely need that,” said Ald. John Arena, 45. “But nothing for mental health.”

Several aldermen also said that they were told Chicago Police Department hiring next year would simply keep pace with attrition, at a time when the city’s gun violence problem has drawn national attention.

The news from aldermen helped round out the picture of how Emanuel plans to close next year’s projected $338.7 million budget hole. Over the last several days, bit by bit, the mayor’s office has released details about proposed tax, fee and fine increases that total about $34 million.

Illegal parkers and lead-footed drivers would be hit especially hard.

Higher parking violation fines and towing fees account for another $11.2 million in projected new revenue next year, Emanuel’s office announced Tuesday. The charge for illegally parking on a street during rush hour would jump from $60 to $100, while parking on residential streets during street cleaning days would mean a $60 ticket, up from $50, among other increases. The cost to store a city-impounded car after it is towed would double, from $10 a day to $20 a day.

Aldermen also said the mayor’s office expects to take in $60 million from a controversial new network of speed cameras, which the city is greatly expanding over the next few months. A WBEZ analysis found the first nine cameras alone would have brought in $13.9 dollars in just the first six weeks of operation, had they been issuing tickets instead of warnings. Another $60 million is expected to come from the city’s existing red light cameras, aldermen said.

“On top of red light cameras, on top of all these other fines, you’re basically telling motorists, ‘You’re not welcome in the City of Chicago,’” said Ald. Scott Waguespack, 32nd.

Aldermen also raised questions about the mayor’s proposal to raise the per-pack city cigarette tax to 75 cents, from 68 cents. If approved by the City Council, the hike would give Chicago the highest cigarette prices in the country, with an average pack costing $7.42.

Aldermen like Brendan Reilly, from the downtown 42nd Ward, worried the higher tax could drive down in-city cigarette sales by a third.

“It could have a negative impact on the retailers, especially those retailers who are in the areas of the city that share a boundary with a suburb,” said Reilly, who is himself, a smoker. “You can simply, literally, drive across the street and avoid paying that tax.”

The mayor is also relying upon $9 million to come from a hike in the city’s amusement tax that’s tacked on to cable television bills. Cable TV companies would see their amusement tax exemption cut, thereby raising their effective tax rate from four percent to six percent.

The nine percent amusement tax that’s added to ticket prices for big concerts and sports events, and a smaller tax for mid-sized venues, would not change.

Developers could also feel the sting. Emanuel is also banking on $4 million in new revenue next year from higher fees for developers who apply for building permits in person, rather than online. The in-person filing fee for a 100,000-square-foot building would total $9,500, compared to $500 for electronic filing. Emanuel had phased out in-person filing altogether, but is bringing it back at the request of large developers who file complicated permit requests, according to spokeswoman Kelley Quinn.

Despite the hours of briefings on Tuesday, some aldermen said they still didn’t have a handle on exactly how the mayor plans to close out next year’s budget gap.

“This was the briefing where they give us all the good stuff,” said Ald. Ricardo Munoz, 22nd, after a briefing Tuesday morning. “Now we gotta wait ‘till tomorrow, go through the budget, and see if there’s some things that we can and cannot support.”